3 Reasons to Make a Charitable Donation Before 2022 Ends

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  • Many people give to nonprofits in December, and those organizations often make a lot of their operating budget at the end of the year.
  • If you donate and itemize your taxes, you can qualify for a tax deduction.
  • Donating to charities favored by friends and family can make holiday gift-giving easier.

It's a wonderful thing to do, and comes with added benefits.

The holiday season is when a lot of people start thinking about charitable giving. According to Nonprofits Source, 30% of annual giving occurs during the month of December. I spent more than a decade working for nonprofit organizations and there was often a stark difference between the amount of money donations made around the holidays versus during the rest of the year, and in some cases, it was money taken in during December that kept those entities afloat year to year. Put plainly, many nonprofits wouldn't exist at all if not for the generous support of everyday people.

If you're in the enviable position of having some extra cash flow this year and want to do some good, now is a great time to open your heart (and checking account) to make a donation to a nonprofit. Here's why.

1. You may qualify for a tax deduction

Many people are rushing to find ways to lower their 2022 tax liability before 2023 starts. If you itemize your tax deductions (rather than taking the standard deduction), donating to a nonprofit organization can lower your tax liability. To determine which tax-filing type makes more sense for you, add up your allowable deductions (such as medical bills and mortgage interest payments) to see if they are worth more than the standard deduction. You'll also want to consult with your favorite tax professional to ensure the donation is documented correctly in your tax return. Per the IRS, you need a record of the contribution, and for amounts over $250, you also need an acknowledgement letter from the organization you supported.

2. It can make holiday gift giving easier

If you're scratching your head and trying to come up with holiday gift ideas, consider making donations in the names of friends and family members. This can be an especially nice gift if you've got a good idea of the causes and organizations that are important to your loved ones.

And depending on the type of nonprofit you're giving to, the gift recipient may also benefit by receiving perks from the organization itself. For example, if you donate to a museum or cultural organization, it takes the form of becoming a member, entitling you (or the person in whose name you're giving) to discounts in the gift shop and on event tickets, and possibly even a mailed publication like a newsletter or journal.

3. You can take advantage of an employer match

Some employers match employee donations to charitable causes and organizations, and so if you give this month, the recipient of your donation might be doubly funded thanks to this. If your employer doesn't offer this perk, you may want to inquire about it -- many businesses are also in the position of needing to maximize tax deductions before 2022 is over.

Remember to do your homework

I hope I've convinced you of the benefits of charitable giving during the month of December (and indeed, all year long). But it's important to do your homework before writing that check or hitting enter on an online donation form. Check up on your chosen nonprofit to make sure it's legitimate.

Charity Navigator keeps records of registered 501(c)(3) nonprofit organizations, and assigns a star rating to them so you can make an informed decision about where to send your money. Those who manage and work for nonprofits (and the people who benefit from their work) truly appreciate your generous donations.

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